Bond, greenback rise, China – 15 Nov 2016

Bond, greenback rise, China – 15 Nov 2016


Bond outflows continue while greenback rise- concerns over China

We have ahead a significant day in terms of fundamental announcements. Inflation macroeconomic data from Europe and UK, European GDP numbers and US retail sales.

Traders should focus on China where we think that the next couple of days are going to have some important events. The Chinese Yuan has already plunged and the central bank of China will most likely react.

We advise caution today on USD and Gold as we can see that the major trend (bullish for USD & bearish for Gold) is losing momentum…. Global stock market is very likely to move to lower levels as there is a significant rise in global yields market, in a short period of time it marks safe heaven bonds more competitive compared to equities.

Next Year Europe is in front of some big risks where the referendum in Italy and the elections in Austria, France, Netherlands and Germany will take place, which might bring gloomy surprises for the unity and future of the European Union.

Daily Key points:
• EM currencies hit fresh 8-month low
• U.S. Two-Year Yield Tops 1%
• The Dow Jones -Nasdaq Divergence Is The Biggest Since 2002
• Chinese Yuan weakest level since 2008
• Asian currencies drop to 7 year lows against Greenback
• Fed Lacker – Trump fiscal stimulus could cause faster Fed hikes
• 10-year JGB yield trades above zero – highest level since September
• Bond outflow since Trump win hits $1.5tn
• Markets pricing a 90% probability that FED will hike next month

Daily Economic calendar:
Country Event Importance Previous Expectations Follow Times
Germany German Prelim GDP q/q High 0.4 0.3 EUR 10:00
France French Final CPI m/m High 0.0 0.0 EUR 10:45
Italy Italian Prelim GDP q/q Medium 0.2 0.0 EUR 24:00
GBP CPI y/y High 0.0 0.2 GBP 12:30
GBP Core CPI y/y Medium 1.5 1.4 GBP 12:30
Europe Flash GDP q/q High 0.3 0.3 EUR 13:00
Germany German ZEW Economic Sentiment Medium 6.2 7.9 EUR 13:00
Europe ZEW Economic Sentiment Medium 12.3 14.3 EUR 13:00
UK Inflation Report Hearings High n/a n/a GBP 13:00
USA Core Retail Sales m/m Medium 0.5 0.5 USD 16:30
USA Retail Sales m/m High 0.6 0.6 USD 16:30

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